Brand Consciousness

I have been in the US for the last couple of weeks and one thing that strikes me is that wearing expensive branded clothes seem to be de-rigueur among all of society. Even when one is driving through poorer neighbourhoods, one notices the expensive sneakers and branded T-shirts.

As the father of two teenagers, I have always had to think about how to get my kids to think about how they spent their money. There was a time when both my kids were mesmerized by Nike et al.
They appear to have grown out of it.

It will be an interesting social experiment to see how today's teenager, who have grown up on a staple of Nike and Reebok and Adidas and Samsung and Apple will make spending choices when they start spending their own income. That experiment is unfolding before our eyes in India right now.

Young adults who graduate out of engineering school or business school fall into three distinct categories. The first set is those that find a job in their own city and continue to live with their parents. These people have comparatively large disposable incomes. Presuming that they do not need to bolster the family income, a large part of their paycheck goes into fueling the consumption machine. This is how we see young adults sporting the latest Samsung Galaxy 6 Edge or the latest iPhone.  The second set is those that need to move to a new city and have to accord different priorities to their income. A big chunk goes into rent and another big chunk into food. They might need to furnish their new home. They might need to put away some more money to buy air tickets for their parents to visit them in their new location, presuming such new location is in a new country. In this case, the glitzy phone or accessories usually take a back seat to more prudent expenses.

The third set is those that have found the fountain of seemingly infinite cash-flow, the credit card. These people stat spending like there is no tomorrow. Some of their purchases are converted to EMIs and others are left to figure themselves out. After all, one only needs to pay the Minimum Amount Due on their credit card bill. In MBA terms, these people have figured out how to spend discounted future income today. And they are fastest in the race of India catching up with a US lifestyle.